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TEL AVIV, Israel, Feb. 24 (UPI) — Prime Minister Ariel Sharon received the support of the centrist, secular Shinui Party Monday, enabling his right-of-center coalition to finalize the composition of a new government.

In last month's elections, Sharon's Likud Party won 38 seats. Shortly afterwards the Russian immigrants' Yisrael Ba'aliyah faction announced its support for Likud, giving the right-leaning party 40 seats.

On Sunday, the hawkish National Religious Party joined the coalition and early Monday, Shinui agreed to join Sharon's coalition government.

As of Monday, Sharon had the support 61 members in the 120-seat Knesset.

Sharon is nevertheless trying to expand his coalition. His representatives have been in negotiations with the ultra-nationalist National Unity, which captured seven seats. Those negotiations were expected to resume Tuesday, after ending in a deadlock Monday over the issue of a Palestinian state, Ha'aretz reported. NU opposes the creation of a Palestinian state.

Likud spokesman Shemuel Dehan confirmed that the new government would be committed to a permanent settlement with the Palestinians as outlined by U.S. President George W. Bush, which includes the creation of a Palestinian state.

However, Sharon has imposed several conditions that must be met before the creation of any Palestinian state.

Education Minister Limor Livnat said Monday that the issue of Palestinian statehood is thus "very premature."

Shinui, nevertheless, appeared satisfied with the government's assurances that it would pursue a permanent peace settlement with the Palestinian Authority.

"The cabinet, in its guidelines … is committed to the peace process with the Palestinians, period," Shinui Knesset member Joseph Paritzky said. Paritzky was expected to be named infrastructure minister.

The cabinet guidelines won't mention Palestinian statehood but Shinui's Avraham Poraz, slated to be the new interior minister, told United Press International those guidelines will express an "adoption" of Sharon's speech in Herzliya.

However, NRP Knesset Member Zevulun Orlev maintained the issue is "for the Messianic age … not actual … with no basis in current reality and therefore we are not frightened by it."

The more hawkish NU would like to join the government but opposes even mentioning an eventual acceptance of a Palestinian state. Some of the NU members have advocated a "transfer" of West Bank and Gaza Strip Palestinians to other Arab countries.

"We and a Palestinian state do not go together," one of the faction's leaders, Knesset Member Benny Elon, said Monday. Writing a letter pledging to fight Palestinian statehood, as the NRP did, "is insignificant," he added.

The faction also opposes the plan that Shinui's leader Tommy Lapid be justice minister because that means he would be involved in shaping the composition of the Supreme Court, which right-wing parties consider too liberal.

The most striking development in the cabinet formation, so far, is Sharon's decision to leave the two ultra-orthodox parties out of his government. Those are Shas whose rabbis came from Arab countries and Torah Judaism whose rabbis came from Europe. Shinui insisted it would not sit with them in the government and forced Sharon to choose.

"It was a strategic decision," outgoing Interior Minister Eli Yishai, of Shas, said. The orthodox parties have been in the various governing coalitions in most of the past quarter century.

The move shocked the orthodox parties, and Shas' supreme leader, former Sepharadi Chief Rabbi Ovadia Yosef, Monday morning reportedly slammed Sharon as "prime (minister) of the garbage cans." Yishai was repeatedly asked about that reaction, leaked from a closed session, and declined comment.

One of the next government's most urgent tasks would be to decide on drastic measures to save the plummeting economy.

Several days ago a top-level official delegation was in Washington trying to secure $12 billion in grants and loan guarantees. It was asked what Israel planned to do to save the economy and could only come up with the treasury's proposals.

Verter noted Sharon "won't have any problems with budget cuts with the liberal Shinui and the extremist right, whether it is shekels 10, 12 or 14 billion."

However, Sharon would have a problem with his coalition once he moves to resolve the dispute with the Palestinians.

This government "will be homogenous, politically, as long as there is no peace process with the Palestinians and as long as Sharon himself will try to macerate every development," Ma'ariv newspaper's political correspondent, Shalom Yerushalmi, wrote.

"With such a coalition it is difficult to go to any significant political process that entails 'painful concessions," added the Ma'ariv commentator Avraham Tirosh.

Sharon has promised "painful concessions" for peace but was never clear about what he meant by it.